Mining Sector Shake-Out Survivors Will Be Much Stronger than Before

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“Overall, the mining industry which emerges from the traumatic recent downturn will be leaner and meaner than the one that entered it.”

Gold stocks, which had been sold down almost pari passu with base metals stocks, despite a gold price level that had not suffered to the same extent as most other metals commodities prices, were leading mining stocks on an upwards path.

When the copper price fell drastically in the early ‘70s, for example, the major copper miners (which the investment community had written off as being almost worthless) managed to restructure their operations to mine profitably at far lower price levels than being received. There is little doubt that today's mining industry can be equally adaptable and much of the fat, which has been built up over the good times, will be surgically excised.

Overall, the mining industry which emerges from the traumatic recent downturn will be leaner and meaner than the one that entered it; and if one picks the right companies, the sector will again be an excellent one in which to invest.

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